Generation costs exceed 266 Euros/MW for this Friday, another day with a record price of gas and combined cycles at full capacity
It is not the best premiere, let alone the one expected by the government, as it relates to the Iberian exceptionalism seeking to accommodate the rise of the light. For the third consecutive day, the cost of electricity generation has risen to more than EUR 266/MWh for this Friday, a 24% increase since this mechanism was applied last Tuesday.
The third consecutive increase is explained both by the increase in the electricity auction and by the compensatory price to be paid by the electricity companies producing electricity from their gas-fired cogeneration plants, as established by the measure adopted by the EU by Spain and Portugal . In concrete terms, the ‘pool’ will be EUR 177/MWh this Friday, compared to EUR 170 on Thursday; At the same time, we also need to add the gas adjustment, which stands at €88.50/MWh, a few cents above today’s session.
A total of 266 euros/MW, which increases to the 259 euros that the market has set for this Thursday, and the 224 euros on Wednesday, the first day of the Iberian exception. All this, compared to the €214/MWh it marked on Tuesday, the last day with the previous system in effect. They remember from the government that without the cap on gas, the increases would have been even higher, to 275 euros/MWh compared to, say, 259 euros/MWh today.
The start of the mechanism coincided with one of the most adverse contexts in the energy environment: a maximum light demand due to the heat wave and the need to use air conditioners and other cooling equipment; a gas price that has risen again on the international market due to supply stops from Russia or the fire at one of the large gas factories in the US, where this raw material that Spain imports comes from; and above all an intensive use of combined gas cycles: for this Thursday, 42% of the electricity consumed comes from these plants, key players in the generation mix like never before, according to Electric Network data. The average contribution of the cycles so far this year has been 17%, a percentage that has risen sharply due to, among other things, the lack of wind energy (without wind) or the technical shutdown of the Trillo nuclear power plant.
Demand for natural gas for electricity generation reached 764 gigawatt hours (GWh) this Wednesday, surpassing the record 754 GWh on June 20, 2008, according to data from Enagás.
In this context, Fedea has analyzed the first steps of the Iberian exception and its impact on the electricity price. “The immediate effect of the measure is positive but modest, reducing the effective price for spot buyers by 5.6%.” In other words, according to their estimates, electricity costs would be up to 5.6% more expensive than the records indicated in recent days.
The government limited in its calculations to 15.3% the reduction in receipt for the average electricity consumer subject to the regulated PVPC tariff during the 12 months of application of the approved ceiling for the generation of electricity from natural gas, according to evidence in the impact report accompanying the Legislative Decree, to which Europa Press has had access. For industrial consumers, fully exposed to the spot price, the government estimated a reduction of 18% to 20%, with the first month of the mechanism fluctuating between 15% and 17%, and between 13% and 15% in the latter.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
